January 31, 2013

Every year in the United States
approximately 1.5 million registered tax-exempt organizations file a
version of the “Form 990” with the IRS and state tax authorities. While
the questions vary between the version for private foundations or small
nonprofits, the 990 collects details on the financial, governance and
organizational structure of America’s universities, hospitals,
foundations, and charities to the end of ensuring that they are
deserving of tax exempt status. These organizations, which together pay
$670 billion in wages and benefits annually, create America’s education,
culture, art, religion, science, and provide many of the social
services upon which our communities depend.

With
a national movement in the U.S. to shrink the role of government,
non-profits may be expected to expand their programs as they step in to
fill essential needs. The role of nonprofits may now become even greater
– and deserving of greater scrutiny.

The
data that the IRS collects about nonprofit organizations present a
great opportunity to learn about the sector and make it more effective.
Yet this data could be made far more useful than it is today. It’s time
to “liberate” 990 data and make it easier to gain insight into the
workings of America’s nonprofits.

The IRS does make nonprofits’ Form 990 returns available, but only on DVDs for a high fee. A single year’s worth of 990s costs over $2,500, arguably to recoup the costs of pressing
and mailing all these dics. But there is no reason to charge for the
Form 990 data at all. Just as most people have gotten accustomed to
sharing large files via a service like Drop Box, it would be simple for
the IRS to publish the returns online for anyone to download in bulk for
free. This week two groups committed to government transparency, Public Resource and the Internet Archive, used their own resources to post 12 years of returns online, demonstrating that it can be done.

As President Obama declared on his first day in office,
“Information maintained by the Federal government is a national asset,”
and IRS data on nonprofits is important and valuable information that
should be available to everyone.

The DVDs are only part of the problem.
Even if you can afford to buy the DVDs with Form 990 data, as some
organizations and news media do, the data on them is contained in image
files, which are created by scanning the printed Form 990s rather than
putting their data into a searchable database. Image files are useful
only for reading about one nonprofit organization at a time. The sector
deserves comprehensive and computable data that can be openly
aggregated, searched, checked, and analyzed.

In
the long run, as a condition of being a nonprofit, organizations should
be required to file the Form 990 electronically, rather than on paper,
and the IRS should publish those returns in formats that lend themselves
to doing aggregate analytics, creating visualizations and building
analytic tools.

The IRS can start releasing in
a timely fashion the data it holds that is filed electronically in
computable form without waiting until all returns are electronically
filed. There’s some debate about how much authority the IRS has to make changes like this on its own, and whether they would require Congressional action.
Others argue that under the Freedom of Information Act, they must
release the data. But we don’t need to wait for either a legal battle or
for the IRS or Congress: The groups that now independently analyze IRS
data can and should take the lead.

Today, the Foundation Center, GuideStar, the Urban Institute, Johns Hopkins’ Center for Civil Society Studies, and Indiana University’s Center on Philanthropy spend millions each
year on converting the IRS images of the Form 990 into clean data that a
computer can ingest and use to perform analysis and develop
visualizations. They’ve had to do this conversion because there has
been no comprehensive set of open data about the nonprofit sector
available to them or the many others who would take advantage of it. But
rather than replicating each other’s efforts and then charging for
access to the results, these groups could follow a more collaborative,
open model. (Some of these groups are beginning to explore a
collaboration.)

At
least for the short term, incumbent organizations whose goal it is to
provide data about the nonprofit sector and who raise philanthropic
dollars to do so can stand in the place of government and make a data
resource on nonprofits available. These organizations and those who fund
them should take their cue from Public Resource and Internet Archive by
pooling their
resources and collaborating to develop a single, open and comprehensive
990 database that is available and free to all.

It
will reduce the costs of data management for these incumbents and make
the task of converting IRS data more efficient. And it need not threaten
their revenue models: What they lose on the sale of bulk data, they can
more than make up for by providing new tools and analytic services.

More
important, free, open, analyzable data on nonprofits will enable more
innovators, researchers, and entrepreneurs to use the data to benefit
the sector. There are now many examples of public benefits that have
come from “opening up” government data. When the U.S. Department of Health and Human Services published
its database of hospital infection rates online in a computable format,
Microsoft and Google were able to mash it up with mapping data to
create an application that shows infection rates for local hospitals
across the country. This tool readily allows anyone — from the
investigative journalist to the parent of a sick child — to see which
hospitals are safest. The National Oceanic and Atmospheric Administration freely
and publicly provides weather and forecast data online, and that data
provides the backbone for such services as the Weather Channel. The GPS data we
use to get from work to home were made available for civilian use by
President Ronald Reagan, who saw the impact these data could provide as a
public good. Cities have unlocked the data on when public transit runs and to where, making bus and subways easier to catch than ever before.

A
comprehensive source of high-quality data on nonprofits, structured to
allow comparisons and analyses across different organizations in the
sector, would greatly enhance and accelerate research about the sector
and make it possible to:

Do
more extensive, in-depth empirical research on the sector as a whole,
including sector-wide issues such as the impact of the economic downturn
on nonprofits, the geographic distribution of nonprofit services, and
the efficiency of the nonprofit sector in delivering services;

Combine
the 990 data with other datasets, such as those on government spending,
to better understand the relationship between public and private
dollars in providing social services;

Query
the data to address issues relating to specific nonprofits, such as
gaining greater insight into 501(c)(4) organizations that engage in
lobbying or finding trends and outliers in executive compensation;

Recognize fraud early, anticipate abuses, and target enforcement more efficiently and effectively; and

Enable
more people and organizations to analyze, visualize, and mash up the
data, creating a large public community that is interested in the
nonprofit sector and can collaborate to find ways to improve it.

Above
all opening up 990 data would attract many new and innovative people
who would bring energy, enthusiasm and creativity to developing tools to
help the neediest among us access better services, nonprofit providers
to become more effective and efficient, and everyone to understand the
role of the nonprofit sector in our economy better. Instead of only the
work that Guidestar’s and Indiana’s employees have the time to do, many
more people could begin to create apps, develop visualizations and do
research than have been able to today.

With
open Form 990 data, we can expect to see again what we are now seeing
in many sectors: When experts of all kinds have access to open data, it
becomes a catalyst for creative problem solving and community
innovation.

January 30, 2013

Today we had our first class of sixty unbelievably energized grad students and one brave undergrad in Gov 3.0 @ NYU.

We got them out of their seats to meet one another and
"speed date for social change" to the end of forming blogging
communities. Cosmo and Laura asked
everyone to make one name tag with three topics about which they are
passionate and another with three skills they have. Then they took over
the hallway and lobby outside the classroom to find complementary
partners with whom to start blogs and "learn out loud" during the course
of the semester. #Education and #Climate were popular destinations as
was #IT and #Collaboration. Over the course of the next few days,
students will self-organize into groups.

While this ice breaker was largely designed to find blogmates so that
the responsibility of launching a blog on "innovation and X" won't be
so onerous and students can learn from one another, it was also an
exercise in learning about what's involved in building a network of
collaborators. It's hard enough face to face in the classroom and that
much harder? or easier? to do with strangers online.

Afterwards we talked about Newtown. I was frankly surprised that their response
to my question about what's transpired since Newtown was to talk positively about
social media stimulating a national conversation on gun control. No one expressed the outrage I feel
about the anemic legislative response. Where, instead, are the collective intelligence
platforms to develop good ideas for solving the problem of guns and
school safety? Or the collaboration initiatives to crowdsource volunteer
labor to protect schools for example? We are so conditioned to today's
institutions that we are content to sit back and wait for the
compromise-ridden, politicized process to play itself outself.

Let's see what we can teach ourselves this term about ways to tap
social media networks and turn their energy into reliable ways of
working together.

We're going to have a lot of fun exploring the
opportunities and limits for collective intelligence and collaboration in this course.

We will run a twitter backchannel in an out of class under #gov30.

Unforunately, the chairs in our classroom are nailed to the floor in a
lecture format, which didn't lend itself to collaboration. We are in
search of a Pop Up Learning Space.

January 26, 2013

The future of our society will depend on how we respond to the crisis of governance.

Governance
-- the way we provide public goods, services, and solve problems
collectively -- is broken. Confidence in government is at an all time
low. Traditional institutions are widely perceived to be untrustworthy
or ineffective. Around the world, we are witnessing public expression
of pervasive disappointment with government and rising hostility toward
mainstream institutions. Especially visible was the Occupy Movement,
which launched in New York City during fall 2011 and rapidly spread
across the globe and took aim at traditional, centralized hierarchies
ranging from governments and corporations to non-profit and media
institutions.

Troublingly,
this erosion of trust in government comes at a time when a large
portion of the world’s population continues to face significant
challenges in daily life. One billion people live on less than $150
dollars each year, and lack access to clean water, basic education, or
even minimal health care. Environmental catastrophes exacerbate their
plight. Meanwhile, rising temperatures threaten the planet itself.

At
the same time, tremendous leaps in science and technology offer new
opportunities to address
such challenges. Social networking and
increased access to data enable citizens to connect and engage with one
another to develop solutions to individual and collective problems. In
order to recognize, implement and scale innovative solutions to public
problems, however, we need open institutions capable of translating
innovation into social progress. In this Cambrian age of big data and
social media, we must use technology to transform governance.

Government 3.0: Rethinking Governance and Re-Imagining Democracy for the 21st Century at the Robert F. Wagner Graduate School
of Public Service at NYU is a semester-long exploration of how to use
technology to improve governance. Through conversations with leading
technology and policy innovators, in-depth reading and, above all,
personal reflection we will teach ourselves more about advances in
technology, how those innovations can be applied to making decisions and
solving problems and design new experiments that might help advance
institutional innovation.

This course is an experiment. We are "flipping the classroom." Instead of passive learning in class, we'll record lectures by leading thinkers and doers working on government innovation to watch at home supplemented by relevant readings. This frees up time in class for active learning. We will work on projects and problems, including blog postings to apply what we are learning to the topics we each care most about.